College Contraceptive Costs Spike

By Lloyd Vries

Updated on: March 23, 2007 / 10:30 AM
/ CBS/AP

Millions of college students are suddenly facing sharply higher prices for birth control, prompting concerns among health officials that some will shift to less preferred contraceptives or stop using them altogether.

Prices for oral contraceptives, or birth control pills, are doubling and tripling at student health centers, the result of a complex change in the Medicaid rebate law that essentially ends an incentive for drug companies to provide deep discounts to colleges.

"It's a tremendous problem for our students because not every student has a platinum card," said Hugh Jessop, executive director of the health center at Indiana University.

There, he said, women are paying about $22 per month for prescriptions that cost $10 a few months ago.

"We've got large numbers of students that are on financial aid, have a couple of jobs, some of them even are single parents, and this is going to impact them dramatically," Jessop told CBS News.

At some schools women could see prices rise several hundred dollars per year.

Many students could shift to generics but experts said they might still pay twice the previous rate. And generics won't work for everyone.

"Only the brand names that haven't got generic equivalents are the kind that work for them without significant side effects," Jessop told CBS News.

"It's terrible, because these are students who are working very hard to pay for their tuition and books at a time when tuition costs are edging up as well," said Linda Lekawski, director of the university health center at Texas A&M, where the old price for birth control pills of about $15 per month is expected to triple. "This is one thing they've been able to benefit from for years."

The change is the result of a chain reaction started by a 2005 deficit-reduction bill that focused on Medicaid, the main federal health insurance program for the poor. College health officials say they had little idea the bill would affect them.

Before the change, pharmaceutical companies typically sold drugs at deep discounts to a range of health care providers, including colleges. With contraceptives, one motivation was attracting customers who would stay with their products for years.

Another reason the discounts made business sense was that they didn't count against the drug makers in a formula calculating rebates they owed states to participate in Medicaid.

But in its 2005 bill — which went into effect in January — Congress changed that. Now the discounts to colleges mean drug manufacturers have to pay more to participate in Medicaid.

The result: Fewer companies are willing to offer discounts.

Many colleges kept prices low for a few months by buying in bulk before the new law took effect, but have now run through their stockpile and started increasing prices. Also, many students fill the prescriptions quarterly so are only now seeing the increase.

Some students said they doubted the price increases would dissuade many students from buying contraceptives, but said it would be noticed.

"I feel like if an individual's going to seek it, they're going to seek it and try to find the resources for it," said Betsy Henke, student body president at Indiana University. But, she added: "Anything that is an increase in what a student is paying is going to have some type of impact."

The price hikes will "definitely have an effect on students," said Lindsay Hicks, a Sexual Health Awareness Peer Educator at Kansas State University, where she said prices were rising from about $10 to about $30 per month.

The ACHA contends the federal Centers for Medicare and Medicaid Services should have added college health centers to the exemptions lists and has supported a proposed rule change that would do so. A spokesman for the agency said it is reviewing that proposal.